HR Analytics – The “GPS” of True HR Transformation

Since the mid-1990s, the phrase, “HR transformation,” has been a part of HR’s common vernacular. In fact, it is so often-used some regard it as almost a form of HR “smart talk” – something that many talk about, but few really understand how to do. The same could be said – most recently – for the terms, “workforce analytics,” “talent analytics,” and other variants of this. Given the frequency of use of both, it is critical to understand what HR transformation really is and the role workforce analytics plays in effective HR transformation.

What is Common in These Definitions of HR Transformation?

Although there are some subtle differences across these definitions, there are core commonalities across these as well. The essence of these are embodied in Ulrich’s work with respect to HR transformation and the four questions he proposes must be asked – and answered – as organizations contemplate initiating a transformational change initiative in HR. According to Ulrich, one must ask:

Why are we doing it? (what is the context?)

What do we get if we do it well? (the outcomes)

How do we do it? (the department, the people, the practices)

Who does it? (line managers, employees, and/or HR professionals).

One key commonality – across all definitions – is the means to measure the outcomes or impact of HR transformational work. In Ulrich’s terms, it’s about “what do we get if we do it well?” With Lessak’s and Deloitte’s approaches, it’s about leveraging benchmarking and analytics to – again – measure the impacts of the investments. HfS/PwC provide additional context to the issue of metrics, focusing on “redefinition” of the metrics of success, emphasizing the importance of business outcomes more than HR process efficiencies as the key measures of effective change.

What Role Does Analytics Play In HR Transformation?

In today’s workplace, analytics can play a critical role in both identification of transformational opportunities and evaluation of transformational impact. When you consider the factors affecting a global workforce – collaboration, new technologies, skill shortages, speed of change in business, aging workforce, growth in the millennial workforce, social media, mobile work, and free agency, to name a few – workforce analytics provide the means for organizations to be able to identify areas of opportunity, prioritize the opportunities, and evaluate the impact of human resource transformational interventions.

Deloitte’s approach leverages analytics as a means to evaluate program risk, using workforce analytics to track leadership alignment, change readiness, change impact, training needs analysis, and user adoption. In addition, they encourage the use of benchmarking as a means to objectively assess both efficiency and effectiveness impacts of transformational change. Lastly, they recommend a four-step “issue/facts/understanding/actions” process, mirroring basic scientific methodology by leveraging analytics both identify the opportunities or issues and assess the impact of actions taken.

To summarize, when initiating HR transformational efforts, HR leaders must shift their focus from metrics that drive HR results to metrics that drive business results. Understand – they are not the same. The focus needs to shift from process-related metrics (such as time-to-fill, % of identified successors, and other such measures) to those that are more outcome-focused (such as increasing workforce productivity and maximizing return on workforce investment). To be able to navigate this change – and truly focus HR transformational efforts on improved business outcomes – will require HR business partners & center of expertise team members to truly understand the business they support, know what human factors affect the greatest outcomes, understand how to translate those factors into meaningful measures, and translate their findings to business leaders to demonstrate the value they are realizing.

To get to this place in many organizations, tough choices will be required – especially within HR organizations – as leaders must see to upgrade their internal talent, realizing that many lifelong HR practitioners simply do not have the horsepower to participate in business strategy development, create complex organizational & talent management strategies that align with & support the business strategies, lead execution of HR initiatives to realize these strategies, and measure and manage the realize the necessary outcomes. HR organizations must develop greater analytics skills – not just within their analytics “center of expertise”, but also begin to build analytics “networks of expertise” – requiring HR business partners and other CoE team members to understand, apply, and optimize what they do through the use of workforce analytics.

In summary, HR transformation requires organizations to demonstrate – in business terms – the value of their effort. To do so, HR leaders must learn both the language and “levers” of the business, as well as how to apply HR programs, processes, and practices to affect these in ways that improve business outcomes in measurable ways. HR leaders will need to begin to build workforce analytics acumen within their broader organization and leverage deeper analytics capabilities through engagement of HR professionals with quantitative capabilities – either by acquiring or contracting for such talent. To make HR transformation a reality, workforce analytics – applied to business issues or challenges and delivered by capable, competent HR professionals – is essential. HR transformation can’t happen without workforce analytics; analytics serve as the functional “global positioning system” or GPS for the function’s success.

Mark Berry is a HR leader & passionate proponent of
evidence-based HR practices, who has first-hand
experience establishing a successful "People Insights"
function at a Fortune 200 consumer packaged goods
company, as well as leading HR for a leading
commodity transportation company. Mark’s work has
been honored with Bersin by Deloitte’s “WhatWorks”
Award for Innovation in Talent Analytics and
Workforce’s Optimas Award for Business Impact with
Workforce Planning. Most recently, Mark named as
one of nine “HR Trendsetters” in the January 2015
issue of HR Magazine for his work in workforce
He has 20 years of HR experience (having started as a child) in food ingredients
(ConAgra Foods), paper/packaging (International Paper) and chemical (Borden
Chemical) industries, respectively, as well as 10 years of experience in applied
psychology. Mark holds B.A. & M.A. degrees in Psychology, as well as a M.B.A.
with a concentration in Operations Management.
Mark resides in Madisonville, Louisiana with his wife, Carolyn, and daughters,
Hannah and Grace. In his free time, he engages in masochistic pursuits, such as
ultra-endurance running, including a number of 50- and 100-mile trail races each